|By David Ljunggren

|By David Ljunggren

|By David Ljunggren

|By David Ljunggren

OTTAWA (Reuters) - Canada and China on Thursday settled a trade dispute and said they would start exploratory talks on a free trade pact, but gave few details about a possible extradition treaty for Chinese fugitives which has triggered criticism in Canada.

Canada's Liberal Prime Minister Justin Trudeau, elected last year, is trying to improve ties and increase trade with the world's second-largest economy after a decade of rocky relations under his Conservative predecessor.

Trudeau and Chinese Premier Li Keqiang, who had already met in Beijing earlier this month, agreed to solve a drawn-out dispute over exports of Canadian canola, worth C$2 billion a year.

"Our progress on this file goes to show how two countries willing to collaborate can solve difficult challenges together," Trudeau told a joint news conference. Li said the deal reflected China's goodwill to Canadian canola farmers.

For all the friendly talk, Trudeau is under pressure from domestic critics who charge he is too willing to make concessions in return for more trade with China.

Both nations are now talking about an extradition treaty, which China has long wanted so it can press for the return of what it says are corrupt officials who fled to Canada. Human rights advocates oppose this, citing what they say is a flawed Chinese justice system.

"It will be very important that any future agreement will be based on reflecting the realities, the principals, the values that our citizens hold dear," said Trudeau.

Li did not answer directly when pressed what guarantees China would give that deportees would not be tortured.

Outside, on the lawns in front of Parliament, hundreds of yellow-clad Falun Gong members - a religious group that says it is repressed in China - held a protest.

Talk of a possible extradition treaty comes days after Kevin Garratt, a Canadian held in China for two years and charged with spying, was deported to Canada.

His release came just days after Trudeau visited Beijing and sparked questions about what Canada had given up to secure Garratt's release.

A trade deal could bring an economic boost to Canada, which is struggling with tepid growth and weak prices for oil, one of its main exports. Canada counts China as its second-largest export market after the United States.

Polls regularly show a majority of Canadians do not back the idea of a free trade treaty, in part because of China's human rights record.

(Reporting by David Ljunggren, Leah Schnurr and Andrea Hopkins; Editing by James Dalgleish)